Web Design Business - Start With a Business Plan

Web Design Business - Start With a Business Plan
By Jennifer Kyrnin, About.com

Start with a Plan
So, you've decided you want to earn some extra money as a Web designer. You have the skills and the talent, but how do you start a business? It's amazing to me how many designers decide that the best way to get their business off the ground is by determining their prices. They write to me saying "how much should I charge in Seattle or Saskatchewan?" But pricing is often the least of your worries. Creating a business plan will turn your idea of making money with your Web design into a real business.

You may think that a business plan requires that you have an MBA and an interest in finance and financial accounting, but really all it is is a plan for your business.
If you treat your business seriously, so will your clients.

This is often easy to forget as you design pages for your friends and neighbors. But if you take what you're doing seriously, your friends and neighbors will be more willing to commit money to your burgeoning business.

What is a Business Plan
While your plan can be as detailed or specific as you like, there are two primary things you should include:

1. A description of your business
Be as descriptive as you can be. Include who your customers are, what niche (if any) you'll be targeting, who your competition is, and how your business will compete. Include:
* Clients, both specific and general (ie. Sue's Flower shop and local businesses in my home town)
* Competition, again, specific and general (ie. Wow'em Web Design and other local designers)
* Competitive advantage (ie. I have built four local business Web designs and have an in with the chamber of commerce.)
2. Your business finances
This includes all the costs of your business as well as both how much you need to make to break even and how much you believe you can make. Include:
* Your target salary
* Taxes (30-40%, but consult your tax attorney)
* Business expenses (like rent, utilities, computers and furniture)
* Billable hours (will you work 40 hours a week, part-time, only on weekends, etc.)
If you divide your total expenses (first three bullets) by your billable hours, you have a baseline hourly rate you should charge. More on setting your rate.

Why You Need a Business Plan
Aside from the issue of people taking your business more seriously, business plans can also help you obtain financing and get additional customers. The plan helps you solidify exactly what you're reaching for with your business and should help show the weak spots and where you'll need help.

If you're using the business plan to obtain funding, you'll need to do a lot of research on your financials. Banks and venture capitalists don't fund "best guesses". But if you're going to start your business out of your living room, then you can be less rigorous. But the more research you spend in determining the financials the more likely your business will be a success.

Sit Down and Do It Now
If you really want to have a business in Web design, then writing a business plan won't hurt you. And it might focus your thoughts on the matter. I had one friend who had been desiging Web pages for three years when he wrote up a business plan. He realized from that plan that the reason he wasn't doing as well has he had hoped was because he couldn't charge enough to cover all his expenses as a full-time designer. So, he scaled back his freelance hours to part-time and got a part-time maintenance designer job. He was able to raise his rates because he didn't need the work as badly and was able to go back to full-time freelancing at the new higher rate in only a few months. If he hadn't written out his business plan, he would have just continued to under bid and barely make ends meet. It can work for you too.
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